City Wants Failed Vendor to Fund New System

The Standard Times reported:

The City of San Angelo filed a lawsuit against Utah-based Spillman Technologies, Inc. — a provider of public safety software that bills itself as "the home of reliable innovation" — seeking to recover more than $3.5 million late Wednesday, March 22.

This strategy should be familiar to West Texas football fans who believe the best defense is a good offense.  The City of San Angelo has not shared with the public an investigation as to how their 2014 vendor selection process failed.  Instead the lawsuit puts 100% of the blame on Spillman:

"Spillman fraudulently misrepresented the functionality of its records management and computer-aided dispatch software and its qualifications to implement the system."

Citizens and City Council heard Tuesday how employees knew during the installation process that Spillman software would not work.  The system required too many clicks to dispatch an officer or complete workflow tasks.  Could these not have been seen during a site visit in the selection process?

City documents described the 2014 process:

The replacement of the current system consisted of a comprehensive evaluation of the needs and functionality assessment, development of a Request for Proposals, extensive evaluation and selection process and final vendor selection.

The city borrowed $1.5 million for the system.  To date the city has not shared the actual amount spent to implement and support the system since Spillman was selected.  The city's CAFR pegged the amount spent at roughly $1.1 million as of the end of the last fiscal year (8-31-16).

Citizens also heard of decades of under investment by City Council by postponing needed software updates.  By asking Spillman for $3.875 million the city's lawsuit externalizes all responsibility for Council's long term under investment in this system.

Contrast this decision with City Council's free pass to Republic Services on over $6 million in unauthorized billings to commercial customers over a decade.  At no time did the city engage attorneys in a lawsuit on behalf of the city or its citizens.

The newspaper article listed several significant performance failures with the system.  If there is liability for the incidents listed in the lawsuit, both the City of San Angelo and Spillman bear responsibility. The mix might be 98% Spillman, 2% City, but the city is not Scott Free as it chose Spillman.  To say that amounts to $2.3 million due the city feels like a stretch.

City Council determined Tuesday that action needed to be taken.  Public testimony encouraged self reflection and acceptance of responsibility.  That's good advice as this is not the first vendor being sued by the city.   Spillman now joins the 2013 Sealcoat vendor, Templeton Construction and Alsay, Inc..  Repayment of funds should be a remedy in a fair contract with performance requirements and penalties for failure.

Sometimes the cheap way is the more expensive route.  That's the route City Council, City Manager Daniel Valenzuela and Police Chief Tim Vasquez took in late 2014.  In trying to save $800,000 staff apparently wasted $1.5 million.  Council approved spending $2.3 million it could have spent two years ago for a quality product.
 
The $3.875 million lawsuit feels like a responsibility dodge alongside a legal dice roll to pay for what should have been funded long ago. The city is entitled to sue a vendor for contract nonperformance.  That would mean a refund of the $1.5 million invested to date.

As "damages" equal the exact amount leadership postponed funding for years this lawsuit reflects the city's entitlement.  They don't want a refund for the discounted model they purchased.  The city wants a refund plus money to buy the Cadillac.

Update 3-23-17:   Concho Valley Homepage published a story with information from the city's press release.  San Angelo Live's piece mined details of the city's lawsuit.

Update 7-19-17:  Spillman settled with the city for $1.25 million.

Update 9-4-19:   The City holds $1 million from the Spillman settlement in an account and plans to use the funds for public safety capital items in the 2019-2020 budget.